LONDON: Copper prices fell on Thursday after Reuters reported the White House has yet to decide on refined copper tariffs as officials assess concerns that higher prices could raise manufacturing costs. Three-month copper on the London Metal Exchange fell 3.1percent to USD14,312 a metric ton by 1039 GMT after touching a record high of USD14,875 earlier in the session.
COMEX October copper futures slid 4.2percent to USD6.5355 per lb, or USD14,408 per ton, reducing the premium over the LME prices. The US administration under President Donald Trump is under pressure ahead of mid-term elections in November to demonstrate that its policies are lowering costs for American consumers and businesses.
“That update most certainly sent the cat in among the pigeons,” said Ole Hansen, head of commodity strategy at Saxo Bank, referring to Reuters’ report.
Copper, widely used in power and construction, has gained 16percent this year as metal flowed into US warehouses ahead of potential tariffs on refined copper imports, stoking concerns over availability in traditional consuming regions.
Copper stocks in the COMEX warehouses have reached a record high of 696,259 tons after months of inflows. “Whether these inventories ultimately become stranded, or eventually return to the global market if no tariffs are introduced, may help determine whether current price levels are sustainable,” Hansen said.
After the Reuters’ report was published on Thursday, the premium of the LME cash contract over the three-month benchmark sank to a discount for the first time since late July. The discount was last at USD13.5 a ton, indicating reduced concerns about a shortage of near-term supplies.
Among other LME metals, aluminium fell 1.5percent to USD3,308 a ton, zinc slid 2.2percent to USD3,962.50, lead eased 0.4percent to USD1,907, tin lost 0.2percent to USD54,845 and nickel was down 0.9percent at USD16,740.